RPC Group Plc (LON:RPC), a leading global plastic products design and engineering company, announced today an update in relation to the divestment of its non-core businesses and the recently completed acquisition of PLASgran, a leading UK rigid plastic recycling company.
Sale of Letica Foodservice
RPC has reached binding agreement with Graphic Packaging International LLC for the sale of the Foodservice business of Letica Corporation for a pre-tax cash free, debt free consideration of $95 million. The completion of the transaction is subject to regulatory approval in the United States.
As a result of the sale of the Foodservice Business, RPC has reached agreement to settle the earn-out associated with the Group’s acquisition of Letica Corporation in March 2017. An amount of $7.5 million will be payable to the former shareholders of Letica upon the completion of the sale of the Foodservice Business. No further amounts will be charged to adjusting items in respect of the earn-out. The cash payment of $7.5m compares with the circa 20% (circa $29 million) earn-out settlement indicated in the previous technical guidance.
Disposal of other non-core businesses
Preparations for the sale of the spirits closures business at Bridge of Allan, Scotland, are complete and the business is being marketed to interested parties. Further updates on this process will be provided in due course. The preparations for the sale of the European injection moulding automotive business (comprising of operations at Zevenaar, The Netherlands, and at Rongu, Estonia) have started. It should be noted that there is a continuation of the significant under-performance at the operation in Zevenaar as a result of cost inefficiencies arising from last year’s new product launch.
Acquisition of PLASgran
On 13th August RPC acquired PLASgran Limited, for a cash free, debt free consideration of £34.5 million. Operating from facilities in Cambridgeshire, PLASgran is a leading UK recycler of rigid plastics and in the last financial year generated revenue of £27 million. The acquisition will complement and enhance the existing film recycling activities carried out by the RPC bpi Division, bringing additional annual capacity of almost 50,000 tonnes of rigid recycling alongside the Group’s existing flexible capacity, delivering a total recycling capacity in excess of 100,000 tonnes per annum. The expanded RPC bpi recycling business will serve the UK and Mainland European markets, with all management of PLASgran retained.
